wiz-icon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

What role of RBI is known as lender of last resort?

Open in App
Solution

When commercial bank fails to get their financial requirements from other sources in the market, then they approach the RBI (central bank). The central bank gives loan to commercial banks. This situation termed as a lender of the last report. The central bank ensures that the banking system does not suffer any set-back and money market remains stable.


flag
Suggest Corrections
thumbs-up
29
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Credit Creation
ECONOMICS
Watch in App
Join BYJU'S Learning Program
CrossIcon